“I told Microsoft that its royalty rates were too high for the patents they claim are applicable to the interoperability information. In response, Microsoft has slashed its requested royalties for a worldwide licence, including patents from 5.95% to 0.4% – less than 7% of the royalty originally claimed.”

“I told Microsoft that it had to make interoperability information available to open source developers. Microsoft will now do so, with licensing terms that allow every recipient of the resulting software to copy, modify and redistribute it in accordance with the open source business model.”

“I told Microsoft that it should give legal security to programmers who help to develop open source software and confine its patent disputes to commercial software distributors and end users. Microsoft will now pledge to do so.”

“I told Microsoft that developers who sign licensing agreements with them should have the means to ensure respect for the 2004 decision. Microsoft has now accepted that it must give legally binding guarantees to licensees about the completeness and accuracy of the information it provides and that the licensee can obtain effective remedies, including damages, from the High Court in London.”

One key question is whether the patent pledge to open-source developers will apply just in Europe or around the world. More to come.

Update, 11 a.m.: Here’s Microsoft’s statement:

“At the time the Court of First Instance issued its judgment in September, Microsoft committed to taking any further steps necessary to achieve full compliance with the Commission’s decision. We have undertaken a constructive discussion with the Commission and have now agreed on those additional steps. We will not appeal the CFI’s decision to the European Court of Justice and will continue to work closely with the Commission and the industry to ensure a flourishing and competitive environment for information technology in Europe and around the world.”

I’m still digging into this, and I’ll have more later.

Update, 4:25 p.m.: Here are reactions from some of the people I spoke with about the EU developments today:

Last month’s court ruling basically forced Microsoft’s hand, legal experts said. “When the judgment came out it was obvious that the entire Microsoft campaign and strategy hadn’t worked,” said Rony Gerrits, a lawyer with Morrison & Foerster law firm in Brussels.

The concessions are “a change in how Microsoft has been acting,” but more details are needed before reaching conclusions about their potential effectiveness, said Shane Coughlan, coordinator of the Freedom Task Force inside the Free Software Foundation-Europe.

“This agreement appears to set a framework for increased interoperability, in potential,” Coughlan said. However, he added, “What we have to do is make sure that this agreement is complete and that it will allow the type of interoperability that we need for a fair technology market.”

The new licensing terms “will quicken the level and intensity of competition in some of these other areas in a way that I think will be beneficial to consumers,” predicted lawyer Donald Falk, a partner at Mayer Brown who has represented various Microsoft rivals and trade groups involved in antitrust proceedings against the company.

That doesn’t necessarily mean Microsoft won’t prevail in the server market, he said. Rather, it means that if the company does ultimately win, it would be more likely to do so based on market forces and the merits of its business, not from an unfair competitive edge.